Recommendations on ART Innovation Challenges - Case Study Example

Recommendations on ART Innovation Challenges Introduction Applied Research Technologies, Inc. is a technology company that served as an emerging giant in the field on the global front in 2006. From its start, the company had grown through a series of mergers and acquisitions of a number of technology-based industrial companies, mostly in the LBO buy out waves in the 80s and 90s decade. As of 2006, the company had established itself as a multinational corporation comprising of around 60 profit centres that served as the company’s business units that brought in revenue of $11 billion. The success of the corporation is mainly the effect of the several major divisions that have enabled it to explore several fields concurrently. These include; healthcare, energy, industrial automation and HVAC. However, this decentralized management philosophy is also coupled with an innovative and entrepreneurial culture creating a good mix for business integration. This has seen the company dedicate itself to supporting innovations through funding and organizational practices with each division required to have products developed in the last four years comprise at least 30% of the sales (Bartlett and Beckham 2). With such a promising resume, the company’s CEO David Hall began pushing for the increase of ART’s global presence that saw the creation of the Filtration Business Unit in 1996. The filtration unit is a business that ART acquired from an oil and gas exploration services company with the core interest being the provision of mobile water treatment services to exploration companies enabling the meeting of the threshold set by the government for water recycling. However, the incorporation of Chinese firms commoditized the sector which reduced the margins of profits (Bartlett and Beckham 3). The effect was that ART decided to develop new technologies and products which resulted in a couple of high profile failures. One of these failures was the multi-million dollar mini water oxidation project spearheaded by Peter Vyas, the business manger of the filtration Unit (Bartlett and Beckham 2). The project that had been the works before Vyas was promoted consisted of a small-scale oxidation system without bulky equipment capable of waste water into clean and safe drinking water in a matter of minutes with technology sourced from an Indian start company. Although it had potential to be a big success but problems in the design, development and marketing strategies had resulted in the failure of the project in two phases. However, the management of the unit still wants to see the project’s success and has allowed Vyas to have another attempt. With the repeated failure there are a number of issues that Vyas needs to address if his $2 million request for a re-launch is to push through. My recommendation to peter would be that he should endorse the $2 million request and re-launch the project. The failures of the previous phases of the project can be mainly attributed to lack of funding. Initially, the project relied on donor funding to further the research. This stretched the budget with the final product providing clean water with odors. The filtration unit previous management had even abandoned the project altogether in a bid to cut running costs (Bartlett and Beckham 4). However, the project phase currently in the pipeline has shown a lot of promise with the water produced being clean and safe. This means that a 2 million dollar investment could result in a project that could enable the company to fully exploit the 9 billion dollar domestic water equipment market in the US (Bartlett and Beckham 6). Mr. Vyas should therefore fully back the request and make his case to Jackson by stressing the innovations and improvements added to the project in terms of design, efficiency, sustainability and functionality. In his argument, Vyas needs to stress that the improvements increase the probability of the success of the product many folds coupled with the advantage of being the first mover of such a product in the US. However, his presentation to Cynthia needs to include specific information on costs, targeted market and projected sales that will elaborate the business plan that will be used for the product. This will mean that he needs to elaborate how the $2 million will be used in the successful implementation of the project like what fraction will be used for advertisement and marketing of the RIMOS to propagate knowledge of the product among customers and how this will impact its demand and therefore the product’s success. However, Peter needs to do more than just back the request. He has to focus on the morale and the functionality of the team as a whole. When he assumed the role of the unit’s business manager, the two major problems were low morale and a growing turnover. However, he dedicated himself to removing the former by rebuilding the team and ensuring that it was made up of entrepreneurial minded people (Bartlett and Beckham 3). However, time and the effect of failure have taken a toll on the team’s morale. Peter could recommend to Jackson that the unit could establish compensation strategies that focus on improving the morale of the team. In my view, if the team is rewarded for achieving certain milestones in terms of production or unit sales, it would enhance the attainment of success of the project. Then there is the issue of discipline and leadership style. The first phase of the project mainly failed because the design of the project was rushed and did not iron out some of the key issues of the prototypes which saw the water treated having orders. Although the company policies emphasize a fast approach in the movement of the project through the design pipelines so that it reaches the market as soon as possible (Bartlett and Beckham 3), it is necessary for the a project to have enough time so that it is successfully developed and integrated in the market without defects. This means allowing the team sufficient time without pressure. Vyas leadership style allows for this. However, the organizational leadership style used by Cynthia and Wagner may hinder such a progressive direction in the project. Their approach to leadership has seen them pressure the group to deliver which has resulted in misunderstandings that threatened to hinder the project were it not for the Vyas intervention (Bartlett and Beckham 7). As a part of his case to Jackson, he needs to ask that his team be given the necessary time so that they are to “pay attention to detail” to avoid the failure of the project. However, this does not mean that there should be no discipline. One of the major issues, especially on the Indian side is that the team seems not to be paying attention to deadlines (Bartlett and Beckham 7). If the project is to continue successfully this needs to be checked. My recommendation is that Vyas should propose to Jackson that they should establish stringent penalties for failures to meet deadlines. This will mean that all components of the team will endeavour to produce quality products within the speculated time. The final recommendation has to do with the distribution lines that the product will use. During the formulation of the business plan to re-launch of the project, Vyas recognized that his team as well as the unit as a whole lacked the necessary professionals and structures for the successful integration of the project into the market (Bartlett and Beckham 7). The HVAC division that had been in place for a longer time compared to the Filtration unit had more qualified professions and systems. This saw him contact HVAC’s residential market division who advised him to take advantage of synergies and contacts established in their division. However, HVAC’s division’s senior management had a policy that necessitated full discretion in the products distributed through their channels (Bartlett and Beckham 7). This means that Peter has to convince these executives that the project needs to utilize their distribution channels if the project is to be successful. My recommendation is that he should convince them before going into the meeting with Jackson if possible so as to show the increased possibility of the project’s success. Work cited Bartlett, Christopher and Beckham, Heather. Applied Research Technologies, Inc.: Global Innovation’s Challenges. Harvard Business School: Brief Cases, 2006. Read More